Top 10 Home-Price Highlights from the August Case-Shiller Report (It’s Mostly Good News)

The latest S&P/Case-Shiller Home Price Index came out this week, and it brought mostly good news for homeowners across the country.

The Case-Shiller National Index covers all nine U.S. Census divisions, giving us broad insight into national home-price trends. The 20-City Composite shows what prices are doing in 20 of the nation’s largest metro areas. The latest report contained data through the end of June 2013, due to a two-month reporting lag.

Top 10 Highlights from the August Case-Shiller Home Price Index

Nationally, home prices rose 10.1% in the second quarter of 2013, compared to the same period in 2012. The 20-City Composite was up 12.1% in June, compared to a year earlier. Here are some of the metro-level highlights:

Atlanta had the largest monthly gain in the latest report, with home prices rising 3.4% from May to June of this year. Coincidentally, prices also rose by 3.4% from April to May of 2013. But prices could start cooling within the Atlanta real estate market, due to inventory gains. Atlanta is currently one of the top 10 housing markets for inventory growth. This could put downward pressure on property values, going forward.

Chicago had the second-largest monthly gain in the latest Case-Shiller Home Price Index. House prices in the Chicago metro area rose 3.3% from May to June. According to Realtor.com, the median list price for this housing market rose by nearly 20% over the last year or so.

New York City recently had its largest monthly price gain since 2002, long before the housing crisis began. From May to June of this year, NYC home prices rose by 2.1%. The real estate recovery has been slow in reaching the Northeast, so this comes as a welcome sign.

New York also had the most acceleration in price gains at the monthly level. From April to May, prices rose by 1.6%. From May to June, the monthly gain increased to 2.1%. According to Realtor.com, there are 18% fewer homes for sale in the New York metro area today, when compared to last year. This could increase the level of appreciation in this housing market, over the coming weeks.

Las Vegas had the largest annual gain in the latest index. According to the August report, prices in Vegas rose 24.9% from June 2012 to June 2013. Inventory is the big story here. According to Realtor.com, the total number of listings has declined 19% in the last year. But inventory appears to be leveling off in this market, much to the joy of home buyers. Over the last month, inventory actually rose slightly.

San Francisco had the second-largest annual gain, close behind Las Vegas. Prices rose 24.5% during the last 12 months of monitoring. Home buyers in the San Francisco real estate market face a perfect storm of obstacles. All-cash investors are still making life difficult for the “regular” mortgage-laden buyers, while falling inventory continues to push prices upward.

San Francisco home prices have rebounded the furthest from their crisis low point. Since March 2009, when this market officially hit bottom, prices have risen by a whopping 49%. That’s more than any other metro area tracked by the Case-Shiller Index.

Phoenix’s housing market is right behind San Francisco, in terms of trough-to-peak recovery numbers. Home prices in the Phoenix area have risen by 37.1% since their lowest point in September 2011. Inventory is still shrinking in Phoenix, according to Realtor.com’s monthly housing summary.

Dallas home prices recently rose above their pre-crisis peak, and they continue to rise month to month. The housing crisis is officially over in this metro area. Prices rose 1.7% from May to June, and 8% year-over-year.

Denver’s housing market has also officially recovered from the housing bust. Like Dallas, house values in the Denver metro area have surpassed their pre-crisis peak levels, having risen by a healthy 9.4% from June 2012 to June 2013.

What’s next for the housing market? Where are home prices headed through the end of 2013, and into 2014? We expect prices to continue rising in most cities across the country — and to start rising in some of the more sluggish real estate markets along the East Coast and in the Midwest. Prices will begin cooling in some of the hottest markets in the country (Las Vegas, Oakland, Sacramento), as inventories level off to create a better balance of supply and demand.